Market :- Market is a place where buyers and sellers buy and sell goods and

services. For example, Chandani Chowk, Delhi Stock Exchange. Market is cleared in the sense that there is no unsold stock and no unsupplied demand. A market is a mechanism by which buyers and sellers interact to determine the price and quantity of goods and services. Samulson & Nordhaus Market may be as small as a fish market in a corner of a city or as large as the entire world. Example, the global market for arms, cars etc.

Free Market :- A free market is one in which market forces of demand and
supply are free to take their own course and there is no outside control on price, demand & supply.

Equilibrium:- It is a state or condition once achieved tends to persist.

1. Short Run Equilibrium 2. Long Run Equilibrium In physical sense, the term equilibrium means the state of rest. In general sense, it means balance in forces working in opposite directions. In the context of market analysis,Equilibrium refers to a state of market in which quantity demanded of a commodity equals the quantity supplied of the commodity. The quantity of demand & supply produces an Equilibrium Price. The equilibrium price is the price at which quantity demanded of a commodity equals its quantity supplied. Equilibrium Price is also called Market Clearing Price. # Equilibrium price of a commodity in a free market is determined by the market forces of demand & supply.

Function :- A function is a mathematical techniques of stating the

relationship between any two or more variables having cause-and-effect relationship. A function involving only two variables, one depandant and one independent is called a bio-variable function. And a function involving several variables one dependent and more than two independent variables is called a multi-variable function.
Pizza Price 100 80 60 40 20 00 No. of Pizzas Sold 00 100 200 300 400 500

There are only two variables involved , pizza price & pizza demand. We have calculated that demand for pizza depends on its price. The same statement can be written as Demand for Pizza is the fuction of its Price. In mathematical terms, this statement is written in its functional form as : Dp = F(Pp) Where, Dp = demand for pizza & Pp= pizza price/unit Suppose, there are two variables X & Y and these variables are so related that the values of Y depends systematically on the value of X. i.e- variable Y & X are related in cause-and-effect manner. This relationship between variables X & Y can then be expressed in the form of an equation. Y = F(X) Is read as Y is the function X. It means that the value of Y depends on the value of X and that for each value of X, that is a unique value of Y. The variables, X & Y may represent any two economic variables. # Relationship of different economic variables consumption a function of income.

Demand :- Demand takes care of Revenue and supply takes care of

Cost. Demand is a function of price whether direct or indirect. Demand is independent variable(takes on X-axis).

Supply :- Supply of any commodity means the quantity offered for sale by
any firm (or by an industry) at a particular price of that commodity.

Goods :- Any thing that satisfies human wants is known as goods. Different
types of Goods are:
1. Free Goods:- Goods which are available in abundance and hence

without payment are free goods. Example: air, sunshine

2. Economic Goods:- Those goods that are scare and hence with a

payment.
3. Consumption Goods:- Those goods that directly satisfy human wants

are consumption goods.

4. Public Goods:- Those goods which are for public use like, public

transport, parks etc.

5. Capital Goods:- Those goods that help to produce some tangible goods

which in term satisfies human wants are known as capital goods.

6. Private Goods:- Those goods which are for personal use like, bike, car

etc.

Characteristics of Economic Goods They are scarce, They are

transferable, They are available in payments

Utility :- It is the ability to satisfy human wants. Production :- Production is a creation of utility & consumption is using up
that utility.

Wealth & Wealfare :- Collection of economic goods is called wealth.